Maybe you can talk to him about being completly insulated during negotiations, or that he needs someone to look out for his interests.  In addition you can anticipate his costs and what he will net.  Ask him why would he pay the price for a cadillac and only expect a yugo.  Ask him why he'd be willing to pay you 5% but not list.  That doesn't make sense try to see how serious he is- maybe he isn't really ready to sell.  Good luck! 

I would either try to meet him in person... I try to be-friend him and explain the benefits of using YOU!!!!
You have to Sell  you before you can think about getting the listing...
I would say,,,"That is great that you are willing to pay me 5%.(I think that we are worth more than that, for all the work, time, and marketing budget,,,) but that is another story...
Can we set up a time for me to go over my marketing plan to get a buyer into this lovely home... (Ahead of time have the listing agreement filled out, all the disclosures and all.. Make sure it is typed in...(The worst thing, is you lost $1.00 and sweat equity in doing this ahead)  I do this because it saves time and they nit-pick less...And they see you are confident in your ability to sell their home... Be a little arrogant... Not really but be sure of your self worth and Real Estate savy...
Offer him a easy exit agreement within 30 days..... This way if he wants to back out, he has a way.. I wouldn't advise doing the print until the 30 days expire.... Do online stuff at first... Show him the benefits that you have and the amount of work he will have will be less...
Like the old saying goes, " We  reap what we sowe..." 
I think we sometimes forget what are Worth in this Industry is... We are providing a service, and let us not forget this...

Constant contact! Make him some flyers wiuth your name on it for his sign box.

Allow them to continue selling privately while you work the listing on MLS. Complete the listing agreement up to the point of them signing it. Have them take it to their lawyer who will make the alterations to allow this arrangement. They are offering 5% if you sell it. The question is what will they pay you if they do. I suspect $0.00. You could offer to do the paperwork for a fee if they get their own buyer. You might get their purchase. Plus you might pick up buyers off their listing.

I just cant understand how the FSBO will not take any of the above arrangements!  what is wrong with them?

The way I see it Johnathan is you have to show them you will work when you get their listing. This does not mean standing on their doorstep and arguing with them that they cannot sell themselves. You need to rollup your sleeves and do some work to get the job. This means helping them work their home as a private sale and if they decide to list with a broker, you will get the call.

Johnathan - I would give them some helpful information on paper so that they could try to sale their property themselves.  Tell them you understand how they feel and that if you can be of further help to please give you a call.  Never say to a seller that they can't sale their own property because they will laugh you right off the porch.  After about 2 weeks go back by and check in to see if they have had much traffic or anyone interested in the home.  If they haven't done an open house encourage  them to do one.  Sometimes the open houses are not successful for them and they give up and contact a Realtor.  It would be nice if they thought of you as being a helpful agent instead of one who was trying to force the issue.  Maybe they can sale it to someone who doesn't have an agent and if you have kept in good with them they might just say they need help with the paperwork and call you.  And guess what - now you have both sides.

And one more thing never show up on the doorstep empty handed - go by a small $1.00 bag of the best chocolate and put your card on the underneath side and then leave it with them even if they say no.  You might be surprised - remember the old saying - you can attract more flies with honey than vinegar.        

He is willing to give 5% but he wont list the house with you? To be honest with you,that doesn't make any sense to me. He doesnt sound like a motivated seller. I am parked here for more comments. Great post.

He will look for reasons not to pay the 5% otherwise he would have listed ,he does not want to pay anything he just wants the buyer. In my opinion only

doesn't make any sense. He wants to see if he can continue to sell on his own and will give you 5% on the chance that you'll go our and work hard and find a buyer.

Finding the buyer is only a part of the job--the biggest part of our job is protecting his equity--making sure he doesn't get sued, protecting his interests because we have E&O insurance and he doesn't.

P.S. You do have the buyers--49% of all home sales result as a consequence of a real estate agent bringing a buyer because the home was listed on the MLS. This gives you FSBO a much better chance of selling his home in a timely fashion.

Also, NAR has studies you may wish to purchase to show your FSBO.

All the best

People who elect to sell their home on their own will not choose to use a Realtor until they have failed to accomplish their goal.  Only then, in my view, will they seek the assistance of a Realtor.  There are advantages to using a Realtor and exposure and expertise are important ones.  If you could list the FSBO's property at the rate he stated he would give you then I don't see where he doesn't have an advantage for using you.  You will give him more in terms of exposure and expertise than he would be able to get himself.

I run into this problem all the time, then I tell them to just be careful becuase so many people are looking to rob fsbo, and that this market is scarey that if paper work isnt done right etc they could get into alot of trouble legally, then tell them how many other homes they are competing with in their city in that price range etc.. then tell them if a buyer isnt driving by this home how do they know its here... and if people are moving into the area how will they know about this home for sale.. I have alot more fsbo scripts.. but Im with ya,, I go after fsbo all the time and usually get them after pointing our major facts.

You need to build the relationship.  Offer to do an open house, talk to them regularly and by all means, show the home to your buyers and get the 5%.   Start off with a commission agreement and maintain  contact with the FSBO.  I usually see week 5 of my FSBO campaign being very busy and week 6 is about the time they list.

I'm obviously biased, but I think a flat fee mls listing is the perfect solution for a situation like this.  When an owner really wants to DIY; they can continue to do so but have access to thousands of buyer agents who use the multiple listing service.

Am  enjoying following this, as I have been talking to a co-worker about going after FSBO's.  And I don't partner up easily!

I am interested about how people offer to do an open house for a FSBO, when there are no agreemtents for anything in writing- how do you protect yourself if a buyer does come in that is interested in that particular house??

My team offers to do open houses for FSBOs, we get a commission agreement.  FSBO, Fastest Source of Business Opportunity

So they sign something for any buyer you bring in???

Its been over a week, has anything changed. I think this seller is just afraid to list with a Realtor. Stick with him, as he sees no or little traffic by not being on the MLS, he will call you. Constant contact with this seller with get him to come around and list with you. The battle has already been won, he agrees to pay a commission. Or heck, find a buyer and get paid$.  

It's hard to get an idea of what this seller is all about.  Without knowing his reason to sell, his timeframe, its impossible to understand what motivates him.  Maybe he isn't motivated, is his price unrealistic.  Those are the questions I always ask first when talking with a FSBO, without understanding those answers, I find it very difficult to develop any type of repoire with them over the phone.